The Chinese company Yili, a key player in
the dairy industry, has officially stepped into the goat milk market. Although
the official website of the country’s regulatory department has not yet made a
public announcement, several media companies have received confirmation from
Yili that on November 29, the company received an official registration number
for its goat milk powder formula.
According to sources familiar with the
matter, around one month ago, Yili was already preparing to purchase goat whey
powder from overseas. Yili has succeeded in registering its goat milk powder
formula, and plans to move this product to the market quickly.
New policies
benefit milk powder companies in China
Under a new registration policy, large Chinese
companies in the milk powder industry are currently enjoying bonuses for
registering formulas. According to data from AC Nielsen, since 2017, baby
products and baby foods have seen a rise in the Chinese market due to the
stable development of the Chinese economy, increased trust from consumers, the
implementation of China’s second child policy, an increase of the birth rate in
China. These factors have caused an increase in all channels of domestic
production and consumption of milk powder, an in particular, Chinese milk
powder products are beginning to make up an increased share of the market
compared to foreign products. The data shows that between October 2016 and September
2017, the number of Chinese brands of baby milk powder increased by 9%, while
the number of foreign milk powder brands increased by only 5%. In other words,
the gap between Chinese and foreign companies in the milk powder market is
shrinking.
After thousands of registered formulas, milk powder
registration standards become stricter
According to familiar sources, in 2017, during which
what is called “the most extreme milk powder policy” was passed, the potential
reward of registering multiple milk powder formulas outweighed the potential
challenges. Data shows that on January 11, 2017, the Food and Drug
Administration of China (FDA for short) announced the registration of 36 milk
powder formulas, and during the entire year, over one thousand milk powder
formulas were registered. As a result of this new piece of legislation, Chinese
milk powder products came to make up over 80% of the Chinese market. Although
the door for milk powder formula registration remained open in 2018, the
formula registration standards were stricter than in 2017, making it more
difficult for a large number of companies to register their products. Yili was one of the companies to take advantage of this golden
opportunity in 2017. Yili has registered 10 brands of milk powder under its
name with 30 formulas.
After the implementation of the second
child policy in China, the Chinese birth rate has been steadily increasing,
which has led to an increasing demand for milk powder products. With these
current social conditions, as well as the increased FDA standards for milk
powder formula registration, companies that already hold a registered milk
powder formula have a great opportunity to find success in the market.
For more information on China’s dairy
market, please check our Dairy
Products China News.